[2025] UKUT 00138 (LC)

The context for this part of our decision begins with the figures we set out in the first two columns of table 1 (at paragraph 55 above) above, from which it can be seen that NR’s requirement over the last 16 years rose to a peak in 2014/15, dropped, fluctuated, and is now at an all-time low. The sleepers experts disagree about the reasons why it is so low at the moment; they agree that it will pick up, but not by how much.

The context also requires an explanation of two things; first, of the use by NR of track renewal trains and, second, of how NR is funded.

As to track renewal trains: Mr Jarvis explained that the conventional approach to track renewals involves the old track being cut and removed in 60 ft lengths, loaded on to flat wagons and taken away. New sleepers, delivered to an LDC, are then shunted and brought to the worksite, lifted off using manually operated worksite plant, and placed into the track bed. Rails are threaded on to the sleepers and clipped into place, again using manually operated plant. Such work is generally done at weekends with the track closed for 28 or even 52 hours, with replacement bus services provided in the meantime.

A track renewal train is a train that renews track in a fully automated process. It is loaded with sleepers and rails; at the worksite it removes the rails and the old sleepers, places in new sleepers, and replaces the rails. It consists of automated machinery and equipment that can be loaded with new sleepers and is then hauled to a site of work on the railway network. It then replaces the rails and sleepers, taking the old sleepers away to be unloaded. A track renewal train can renew half a mile of sleepers on a midweek night, involving closure of the track only between 22:30 and 05:00, with almost no disruption to services. Although fast and efficient, track renewal trains put a lot of pressure on sleeper manufacturers because large quantities of sleepers are needed, together with extra space for loading and unloading. They also have an impact upon the site where sleepers are manufactured because extra-long sidings are needed to accommodate the wagons used to pick up sleepers to be loaded onto the TRTs. The first track renewal train used on the network, Mr Heubeck explained, was bought for the WCML Upgrade project which was completed in 2009, and supplied with sleepers from WWH; NR bought a second one in 2011. After 2015 a lower volume of work was needed; only one track renewal train was in use after 2018/19 and the other operated only until 2024; they are no longer in use and there is no prospect of their being used in the future.

According to Mr Heubeck, track renewal trains increased NR’s requirement for sleepers because, whereas traditional renewal methods would replace only sleepers that were truly life-expired, it was inefficient to use the track renewal trains like that; they needed to replace long stretches of track in one pass. The use of trains therefore increased the requirement for new sleepers; conversely, according to Mr Heubeck, the cessation of their use is a reason for the current low requirement. Mr Jarvis expressed the view that the difference in the amount of sleepers used was minimal.

As to NR’s funding: Mr Jarvis explained that NR’s track maintenance and renewal is funded in five-year Control Periods, or CPs. The relevant CPs are:

At the date of this decision the first year of CP7 has just come to an end.

NR is informed of the budgetary settlement for each Control Period and then decides, in a Strategic Business Plan, how to spend the money - whether on signalling schemes, structure renewals (such as bridges and tunnels), earthworks, or track renewals including sleepers. Mr Heubeck explained that the business plan is then submitted to the Office of the Rail Regulator, which examines its efficiency and effectiveness and issues a determination about NR’s funding and planned activities. This is a protracted process; once it is completed the resulting requirement for sleepers is then submitted to NR’s centralised Supply Chain Operations, which is responsible for supply chain management and decides how the supply is to be split between the two sleeper suppliers.

Importantly, therefore, NR cannot control how much money it gets but it can make its own decisions about how the money is allocated, subject to the scrutiny of the ORR. We have been assisted in our consideration of future requirement by the terms of the Strategic Business Plan for CP7.

With those aspects of the context in mind, we turn to what the parties said about future requirement. It is agreed that the NR’s current requirement (just over 307,000 in 2024/25) is an all-time low. In their Statement of Agreed Facts and Issues (“SAFI”) the sleepers experts said:

“4.51

NR's demand for concrete sleepers in the current 2024/2025 year is at a

historically low level of demand which is due to a combination of factors:

4.51.1

High volumes of concrete sleepers being replaced between 2002 and 2018.

4.51.2

Modern sleepers, which are part of an improved overall track system, lasting longer than their predecessors.

4.51.3

NR ceasing to use Track Renewal Trains as a means of delivering high volumes of “strategic” track renewals.

4.51.4

Improved track condition data being routinely provided to local track engineers, enabling more precise specification of smaller scale “tactical” track renewals.

4.51.5

Within the track engineering discipline, rerailing, re-ballasting and certain switch and crossing renewals all being accorded a higher priority than the replacement of concrete sleepers.

4.51.6

A reduced spend on track renewals overall, due to an urgent need to increase the spend on other assets, at a time when the overall funding settlement is relatively constrained.”